It would permit millions of homeowners who do not itemize on their federal tax filings to claim a deduction for at least part of their local and state property taxes. Though the House version set the maximum write-off at $350 a year for single taxpayers and $700 for married joint filers, the Senate's $500 and $1,000 were expected to prevail.

Intended as a one-year measure for Americans who do not itemize, tax experts say it's likely that the new write-off will be written into the tax code. It would cost the federal treasury from $1.2 billion to $1.5 billion.

According to an analysis of 2005 IRS data by the non-profit Tax Foundation, only 35.6 percent of taxpayers -- tenants as well as homeowners -- itemize.

Among homeowners nationwide, an estimated one-half itemize, but one-third have no mortgage debt, so they do not claim mortgage interest as a deduction.

The new legislation would effectively add another tax preference for people who own houses while offering nothing to those who rent. The idea, say supporters, is to provide greater tax fairness for a huge category of owners -- often seniors and lower- to moderate-income households -- who opt for the standard deduction but pay local and state property taxes.

Critics say the plan's just another example of the government's inequitable approach to housing policy -- overemphasizing the financial benefits of homeownership versus renting.

"We think [the new deduction] is terrible policy," said James Arbury, senior vice president for government affairs of the National Multi Housing Council, the country's principal trade group for rental property developers, owners and managers. "It actually makes things worse" by sweetening the pot further for ownership while ignoring tenants -- the vast majority of whom are non-itemizers.

"Many renters are under the same economic duress as owners," said Arbury. "But nobody is giving them new tax deductions."

The National Multi Housing Council has fought a long, unsuccessful campaign to persuade Congress to take a more even-handed approach in supporting taxpayers' housing choices.

"We understand why members [of Congress] would want to put more goodies in homeowners' baskets" in political terms, said Arbury. Owners outnumber renters roughly 2-1 and have influential lobbies such as the National Association of Realtors and the National Association of Home Builders. But renters ultimately end up paying for part of the subsidies that flow to owners, and, say critics such as Arbury, that's not fair.

The Senate version of the housing bill provided the $500-$1,000 maximum deductions, but also contained language clouding the use of the write-off in jurisdictions that raise property rates immediately after enactment of the legislation through Dec. 31 of this year.

The House was expected to demand removal of those restrictions as the price of accepting the Senate's higher limits. Though specific procedural details were not spelled out in the legislation, all owners who opt for the standard deduction on their 2008 tax filings are expected to be eligible.